Poker machine maths

Poker machines are unique in the gambling world. They are the only form of gambling that has been designed and crafted for the purpose of making money, and where there is absolutely no chance of influencing the outcome. Cards, horses, roulette, sports… with all of these, there are decisions that can be made about what sort of bet to make, who to bet on, what the chances are. These decisions influence the end result. With poker machines, you push a button. That’s it.

But, I hear some of you say, at least poker machines aren’t that bad. They have a guaranteed return-to-player percentage which is pretty high, don’t they? Well, yes… and no. It is true that, by law, poker machines in Australia have to return somewhere between 85 per cent and 90 per cent, over time, to the player. This might seem like a good thing, but it’s not. The reality is that today’s poker machines can satisfy this requirement while still bleeding the public dry. The reason for this paradox? Poker machine mathematics.

Let’s take the case of a stereotypical poker machine player. Meet Gladys, a resident of the Happy Valley retirement home. Every week, on pension day, Gladys hops on the mini-bus with her friends and heads off to her local club for a “bit of fun” on the pokies. She likes it there, the young staff are lovely and helpful and it’s a welcome change from the home. Besides, you never know… she just might win.

So Gladys settles down in front of her favourite game, pulls a $20 note from her purse and gently feeds it in to the machine. It’s a 2-cent machine, with 50 lines, so that’s a dollar a game. There are multipliers, but Gladys doesn’t like those. They’re for the big spenders.

Gladys likes to take her time and enjoy the day. She watches the reels spin and, once they’ve stopped, she likes to look at the end combination and see how close she might have been to a big win, or work out which lines she’s won on. She doesn’t play fast; maybe 10 games a minute, which is pretty slow for a poker machine. Pokies will let you play between 20 and 30 games a minute, depending on which state you live in, but Gladys likes to play slowly. So 10 games a minute it is.

Gladys plays, and plays, and plays. She stops for a bit of lunch, which is put on by the retirement home; this is their day out after all. She also takes a short break for a cup of tea, but then it’s back to her machine. She chats a little with her friends, who are playing nearby, but for the most part she’s watching her machine.

By the time the bus is ready to go back to Happy Valley, Gladys has spent about five hours playing “her” poker machine. Over and over again her hands have gone back to her purse to pull out another $20 note and feed it in to the machine; they all add up. She’s spent $300 today, and that’s her pension gone. A little dazed and a little sad, she climbs back on to the bus and heads back to the home… to wait for next week.

This is a familiar tale, but there’s a catch. As mentioned earlier, it’s common knowledge that poker machines have a return-to-player percentage of anywhere between 85 per cent and 90 per cent, depending on where you live and what kind of establishment you’re playing in. For the sake of the story, let’s assume that Gladys’ poker machine was set to 90 per cent. That means that over a long period of time, the machine will return 90 per cent of money gambled to players, and keep 10 per cent as profit.

But wait, I hear you cry. Gladys didn’t lose 10 per cent; she lost it all! Well, no… not according to poker machine mathematics. The rule is that the poker machine has to return 90 per cent of money gambled… not money inserted. And there’s a huge difference.

Gladys played for five hours. She played 10 games a minute; that’s 3,000 games over five hours. 3,000 times that Gladys pushed that little button. And each time she did, she bet a dollar. Sometimes she lost, and sometimes she won; those winnings allowed her to postpone the next $20 just that little bit longer. But by the end of the day, by poker machine mathematics, Gladys had gambled $3,000 in one dollar increments.

Here’s the sting. According to the poker machine, $3,000 was gambled, and $300 (all of Gladys’ money) was kept. That means that the machine paid out $2,700… which is the 90 per cent return. I’m sure Gladys will be pleased to hear that as she sits in the retirement home, waiting for the next pension day.

Those who defend poker machines often point to the high rate of return as one of the reasons that pokies are just “good, clean fun” for most people. The reality is that every poker machine can meet this “rate of return” requirement while still leaving the gambler broke. That’s poker machine mathematics.

Tom Cummings is a former problem gambler who has turned his attention to gambling reform and the industry in general.